VA Loan Closing Costs, Explained: Who Pays What in Springfield

"No down payment" is the headline of the VA loan — but the next question every veteran asks me is: "Okay, so what do I actually have to bring to closing?" Fair question. Closing costs are real, but the VA loan gives you more protection and more options here than almost any other loan. Let's walk through who pays what on a VA purchase in Springfield and Southwest Missouri.

First — what "closing costs" actually are

Closing costs are the fees to originate and finalize your loan, separate from the price of the home. The VA lists the kinds of costs that you and the seller can negotiate over, including:¹

• Loan origination fee and any discount points (to buy down your rate)
• VA appraisal fee
• Credit report
• Title insurance and the recording fee
• Hazard insurance and real estate taxes
• State and local taxes
• Your real estate professional's commission and fees

Your lender puts all of this in writing on a document called the Loan Estimate — the VA specifically recommends reviewing it, because it shows exactly what makes up your loan and an estimate of every closing cost.¹

Good news #1: the seller can pay your closing costs

This is the big one. The VA allows home sellers or builders to offer credits to cover some or all of the buyer's closing costs — and it doesn't limit credits for a loan's actual closing costs.¹ On top of that, sellers can offer "concessions" (things of value beyond normal closing costs, like paying your VA funding fee, paying off a debt for you, or prepaying your hazard insurance) up to 4% of the home's reasonable value.¹

Good news #2: the VA caps what your lender can charge you

The VA also protects you from getting nickel-and-dimed on lender fees. Your lender may charge a flat fee of up to 1% of the loan amount to cover its origination costs and services.² If the lender charges that full 1%, it cannot also tack on certain "unallowable" fees — those have to be covered by the flat fee instead.²

Fees that generally can't be charged to you separately (they fall under that 1% flat fee) include things like:²

• Document preparation and loan-paper / conveyancing fees
• The lender's own appraisals and inspections (outside of construction loans)
• Loan closing or settlement fees charged by the lender
• Attorney's services other than title work

You don't need to memorize this list — that's my job and your lender's. But it's worth knowing the VA built guardrails in on your behalf.

What you can roll into the loan (and what you can't)

Here's a common point of confusion. On a VA purchase loan, the only cost you can finance into the loan amount is the VA funding fee.¹ All other closing costs must be paid when the loan closes — by you, by the seller, or through a lender credit.¹ (Not sure what the funding fee is or whether you're exempt? I broke that down in a separate post — many disabled veterans pay $0.)

So what will you actually bring to closing?

The honest answer: it depends on the price, your lender, your funding-fee status, and — most importantly — what we negotiate with the seller. Closing costs vary based on loan amount, property location, and lender-specific fees, which is exactly why the VA points you to your Loan Estimate for the real numbers.¹ The point is this: between seller credits, the 1% lender cap, and financing the funding fee, a well-structured VA offer can get a Springfield-area veteran to the closing table with very little out of pocket.